The New Economy Hack: Turning Consumers into Producers

Thoughts from Macworld about what Apple's really up to, and how parallel moves by Linux are equally easy to miss.

Last year, in his annual Macworld keynote, Steve Jobs made a big deal about open source. He paced in front of a giant screen that said "Open Source: We think it's great", and he backed the statement by announcing a new Apple browser based on the same KHTML rendering engine as KDE's Konqueror.

I wrote the story up in Surprise: Apple's New Browser is a Sister to Conqueror. It might not have been that huge a deal, but I did expect to see some follow-up news in the next Macworld keynote. After all, Apple had been talking up open source since it announced the BSD-based OS X before the turn of the millennium.

But there was nothing. Jobs talked up UNIX a bit and said that a new RAID product was certified for varieties of Linux; but that was it. The latest Konqueror News is what happened here a year ago.

On the show floor, I went looking for the Darwin folks. Darwin is OS X's BSD-derived base and has its own development community. Some of the Darwin folks at Apple had come over from the Linux world, Brian Croll and others from Eazel, for example. "Where are they?" I asked. One guy told me they were over in the far corner of the other hall, but I couldn't find anything there. Another guy told me Apple assigned the Darwin subject to some other event, perhaps its WorldWide Developer Conference, BSDcon or O'Reilly's OS X Conference. Another guy told me this Macworld had been refocused as a "users" conference, and Darwin and open source were too off-topic.

Sure enough, I couldn't even find mentions of Darwin or open source among any of the breakout sessions. (Maybe they were there and I missed them; still, the point is the same.) That's a far cry from three years ago, when a session on Yellow Dog Linux packed one room while nearby Darwin sessions spilled into the halls.

This all surprised me, because at ApacheCon in November, at least half the hackers there--most of them serious Linux jocks--were using Apple OS X laptops. I figured I'd see some hacker-oriented marketing by Apple at Macworld too, but it didn't happen.

There were plenty of Linux hackers at Macworld anyway. For example, I had a great time getting a rundown from Rael Dornfest on what he's doing with Blosxom, the open-source blogging system that has grown an active and convivial development community. It seemed to benefit from what Linus talked about on the last Geek Cruise: "people who don't flame and are calm and rational--and have good taste". Blosxom clearly has some of those folks hanging around. I could see it in some of the plugins Rael showed me, which were useful and fun. It also blew my mind when Rael said Blosxom is only 200 lines of Perl; right now he's working on getting that down to 150. Most Blosxom blogs run on Linux, he added.

Rael works for O'Reilly, which filled the role of Open Source community nexus on the show floor. It's booth--more like a pavilion--was packed.

So, without some kind of overt open-source story to follow, I found myself looking for insights about a market ecology that takes open source and its developers so completely for granted. And I got what I think is a big one.

The first clue came when Steve Jobs dropped a line about how much he and Apple "love music". Other clues came when he talked about the iTunes music store, which clearly is challenging the established way of doing things in the music industry. Still more clues came when he showed off enhancements to iDVD, which makes producing DVDs exceptionally easy. But the picture finally became clear when he spent an almost unbearably long time showing off a new application called GarageBand, "an anytime, anywhere recording studio packed with hundreds of instruments and a recording engineer or two for good measure". For the first time I saw that this isn't simply a technical or marketing hack--it's an economic one.

It's easy to say that what Apple's doing here is about marketing. But it's not, even though clever marketing is involved. See, marketing is about influencing markets. It's about spin. In the mass-market millieu where Apple lives, it's about maintaining the fully saturated Matrix-like habitat we call Consumer Culture. That culture was built by those who own and control the means of production. So, what we call "consumer electronics" is really producer electronics. It isn't about what you and I invent and contribute to the marketplace. It's about what Sony and Panasonic and Nikon and Canon produce and distribute through retailers for us, the mass market, to consume constantly. It's producerism, really. As a label, "consumerism" is a red herring. Talking about "consumerism" takes the conversation off into victimville, where the poor consumer needs to get better stuff and less abuse from the big bad producer.

Apple is giving consumers tools that make them producers. This practice radically transform both the marketplace and the economy that thrives on it.

Ignore for a minute that Apple's stuff is closed-source, that it has any kind of technical or market-category agenda. Instead, look at what it does to supply and demand, production and consumption. It turns consumers into producers. It changes the marketplace by flooding it with new producers, new products and demand for new means of distribution.

Want to see results? Check out Bush in 30 Seconds, by MoveOn.org, the left-wing, grass-roots issue advocacy organization. These are first-rate TV ads produced mostly by amateurs, in a short period of time. Regardless of your politics, you have to agree that they're equal in quality to anything put out by a high-priced agency or production house.

We're seeing the same thing happening in journalism, with weblogs like those powered by Rael's Blosxom, and the music business, with Magnatune, subject of a big piece in this month's Linux Journal). Soon we'll see it in movies. How long before some low-budget, high-quality movie becomes a huge hit on DVD without any help from Hollywood? How long before Apple starts a movie store? How long before Disney buys Pixar, like Apple bought NeXT, and Steve Jobs takes over Disney? (Trust me, it's a good bet.) Then what?

So there we are: consumers become producers. Now set that aside the way Linus does when he says "That's user space. I don't do user space." Instead look up one level of economic abstraction, to supply and demand. This is where we find the Linux economy hack. Because Linux is something that happened when demand started to supply itself.

Linux is a demand-side movement that recently has been joined by high-profile suppliers, all of which adopted Linux in compliance with a market that independently developed and supplied its own operating system, on highly agreeable terms. As a movement led by resourceful experts who actually do the hard work, Linux is very much like what happened to the building trade in the 1800s, when carpenters adopted stud & joist frame ("balloon") construction, which they've been improving ever since. (Read more about that here.)

This is very different from what Apple and others are doing to convert consumers into producers, but it's still related. It's still part of a Net-enabled shift in power. I've said before this is a shift from supply to demand. But it's better described as a shift of power within supply from the few to the many.

The Mac World (trade show included, pun intended) is still an old-fashioned vendor-built environment--one of the last of its type, you might say. But it also is adapting to a larger ecosystem in which demand supplies its own generic infrastructural building materials, supported by a culture that values sharing and disclosure more than hoarding and secrecy. Even if Apple isn't plugging Darwin right now, the fact that Darwin is UNIX speaks volumes about technology and market ecosystems that Apple understands in ways that other old fashioned companies--notably Microsoft--still don't.

What Apple's doing with "i" apps like GarageBand isn't about the computer industry; it's about the entertainment industry. That industry lately has become vigilant about threats from its customers, which it still thinks of as consumers. Instead it should be watching how Apple transforms those consumers into producers. Because the next challenge will be finding ways to turn those producers into partners. The old gig is up. They'll never be just "consumers" again.

My next stop is CES, the Consumer Electronics Show. Apple won't be there, but Linux will--in approximately everything. I'll let you know how it goes.

Doc Searls is Senior Editor of Linux Journal. His monthly magazine column is Linux For Suits, and his bi-weekly newsletter is Suitwatch.

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Doc Searls is Senior Editor of Linux Journal

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Re: The New Economy Hack: Turning Consumers into Producers

Anonymous's picture

Insightful post, Doc. I work in the music industry and watched the phenomenon you outline actually take shape before Apple's GarageBand. In addition to the economic level you describe, it also operates on a political level. I've extended your argument in that direction at Super Long Play (http://slp.blogspot.com).

Re: The New Economy Hack: Turning Consumers into Producers

jpivonka's picture

There may indeed be a desire by information technology people to move the economy toward providing tools to people who want to create art and ideas, and new (potentially disruptive) technologies.

But that is not the way that the closed society and economy of the National Security State currently being established here, and most everywhere else, is moving. I doubt that Steve Jobs, Larry Ellison, Bill Gates, and all their millions (even were they capable of working together) could overcome the powers of darkness and entrenched, natural resource based industries to reverse the mandate of the information age, and return us to industrial feudalism.

Certainly they will have neither help nor succor from entrenched communications companies like the RBOCS who are attempting to delay and control VOIP telephony. Or from the established medial conglomerates who would perpetuate thier own exploitation of artists while stangling peer to peer technology in its crib under pretext or protecting the intellectual product franchise extended by the republic to those same creators.

From an article published on September 19, 2001 - eight days after 9-11: "However, the ruling Republican Party is going to correct America-s domestic and foreign policies due to the grand terrorist attack. ...control over the private and public life of the American people is going to be toughened, including the business sphere. The U.S. will shift its emphasis from hi-tech constituents over to the raw materials companies -- the ones which deal with oil and gas fuel first and foremost. The weight of the military and industrial complex in GNP will be raised and the national ABM program will certainly be launched. Bush and other figures of the American Republican administration are absolutely interested in this scenario v it is an open secret for everyone."

Well, it's an analysis by a Russian - but I think has proven accurate nonetheless.

Movies

Anonymous's picture

We're seeing the same thing happening in journalism... and the music business.... Soon we'll see it in movies. How long before some low-budget, high-quality movie becomes a huge hit on DVD without any help from Hollywood?

And how long before an open source project/group comes up with some method/protocol/etc, to colaboratively work on and produce a movie? Check act 2 scene 3 out of cvs, add some dialog, define a new character graphically, give him some movement, then check it back in. Then, when its done, all the project contributors use their machines in a distributed processor arrangement to render it.

Re: The New Economy Hack: Turning Consumers into Producers

Anonymous's picture

Very nice article. I think you could have put in two other things that are, I think, associated and obvious enough to show your point.

First is rap music. By removing musical talent from the equation rap has made producers out of its consumers. All you need to be able to do is rhyme and (supposedly) sing. Take samples, stitch together, add vocal track. While I question the quality all day, it has opened up the music production business in a way that even things like punk rock didn't (because you still had to be able to play three chords). Consumers have become producers and a whole community has grown up along side the industry. Apple's iMovie does something similar by allowing people who can shoot (or get footage some other way) to not have to know how to do all the other things associated with making a production like making transitions, putting titles on the screen, etc.

Second advances like those Apple makes drive the rest of the computer industry. Some people will argue that companies like Microsoft are only beholding to their shareholders. But the big companies have figured out that making money for shareholders is a matter of producing what consumers want. So when Apple releases the famously simple iMovie and people start producing things with it, Windows users (which Microsoft tracks just like everybody else) want something similar and Microsoft feels compelled to produce something similar. Even if the program is not creating a big demand in and of itself, the marketplace (including reviewers, retailers, Wall Street analysts, the competitor's pride and consumers who buy based on feature sets they'll never use) push Microsoft to keep pace. And where Microsoft goes, a thousand software houses follow with different versions the same kind of software.

Another small point: I think you missed an important distinction about consumerism. I don't think it's a red herring. It's just a marketing/industry /government term that has leaked into public use. When you look at it from the industry's viewpoint, consumerism aptly describes the situation: it's all about the consumer and making people consumers. You build for the consumer, you market to the consumer, you service the consumer (often in the animal husbandry sense, but still). That's why marketing surveys and focus groups and all those little consumer-tracking tricks have become so prevalent. They need to turn us into a mass society of mass consumers to maximize their sales and thus shareholder value.

Considering the term from the consumer's perspective, as you did, shows it is, indeed, backwards.

Anyway, nice insight, excellent article. Thanks.

joe f.

Re: The New Economy Hack: Turning Consumers into Producers

Anonymous's picture

Wow. Repeatedly I am confused why people thing rapping is easy. I recommend you try, and get back to me on your progress. It is "just rhyming," after all. It should not take you more than a couple of months to come up with an Eminem-level song. The actual rapping of that song may be harder than its formation, depending on you. ^_^ Something else...this is not a reply to joe f., just a general scream. "Rappers can't sing." No *****. They're not trying to, jackass.

In any case, I do not see how Apple is making producers out of its consumers any more than any other developer is. Microsoft has Visual Studio. I buy it, BLAM! I'm a Windows producer. And, I do not charge for any of my products. I buy CorelDRAW for any platform, I produce images, etc. I think the main cause of analytic difficulty is all the levels of abstraction interacting with themselves. I think the difference noted is that Apple advertises its creative consumer software, while Microsoft doesn't even make such software. I mean, wtf is a movie maker? As was pointed out, it is something I am not bound to use, ever. Unless I am piecing together a bunch sectored pornographic videos. For anything serious I use an art program. I think Microsoft's reasoning is, "Let third parties come up with it."

Re: The New Economy Hack: Turning Consumers into Producers

Anonymous's picture

Linux has certainly turned the OS market into something users can produce with. Take Runtime Revolution for example. Users have a script based IDE which is a cross platform multimedia application producer.
What the Linux communitity really needs now, is an Open Source Motherboard based on the AMD 64 bit chip, which is not tied to a measly 1 Gig of RAM or any of the other market place limitations that motherboard manufacturers place on us creative users.
How about Linux Journal taking up the cause with an Open Source design. Then we might be able to pussh the leading edge in this area, like the Linux OS has done in that other user space.
Tom Russell
Computerbank Queensland www.cbq.org.au
Brisbane
Australia

Not quite as rosy as that. Apple is still old school.

Anonymous's picture

While the "i" apps are great enablers, Apple is, like Microsoft, a corporation that is accountable to its shareholders and that make money the old fashioned way: by retaining control. Everything Apple produces that is truly successful is closed source, heavily controlled, and exclusive to Apple. On the other hand, open source software is about removing that kind of centralized control. Despite their support of things like Konqueror and Darwin, I don't see Apple ever releasing enough information for the open source community to be able to really take part in their "consumer as producer" paradigm. Don't get me wrong, Apple's products are really great, but they are still fundamentally all about control.

Agreed

Anonymous's picture

Should we now expect an article about how Sony, Panasonic, JVC, [insert consumer electronics manufacturer of choice] are enabling "consumers" as the new "producers" just because those manufacturers produce digital video cameras? At least those products are less likely to be DRM'd to the hilt whilst producing output that'll be unreadable in five years time.

Control

Anonymous's picture

While important, the freedom-as-in-speech of software is in no way an absolute freedom. It's just a layer. In most cases, the CPU below the software is not free, and in many cases the free software is used to produce non-free artifacts - we know that film-gimp is used to produce films, but the films are not free.

So, the generic freedom to create is distinct from the very specific freedom to copy and modify software. My understanding of this article is that Apple are aiming to create a higher-level freedom, an "ecosystem" of free film and music. The tools are not free, but I think that we will see a lot more free art because of the tools.

If Apple is successful, then there will be a shift in power from the "producers" to the "consumers", as the latter start to compete with the former. This is similar to how Free Software is currently turning the software industry itself around. Apple is just working at a higher layer, one that their business model allows them to work in.

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